Russia 101026 Basic Political Developments

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National Economic Trends

  • September GDP growth reported at 1.8% y/y

  • MinFin closer to getting a tool which would help it control the borrowing appetites of quasi-sovereigns

Business, Energy or Environmental regulations or discussions

  • Norilsk Nickel, Rosneft, Sberbank: Russia Stock Market Preview

  • Tenex could raise syndicated $500 mln loan

  • Tomsk Distribution grids might be managed by EDF

  • Domestic fertiliser producers to pay market price for potash starting in 2013

  • Gov't to eliminate potassium market regulation

  • Export duty for cement abolished

  • Consortium of Evraz, EPK and Severstal to build railroad

  • Sapsan train races ahead in profitability for Russian Railways

  • Yandex launches job aggregator

  • Metalloinvest holder mulls selling stake –paper

  • Anisimov May Sell $4 Billion Metalloinvest Stake, Vedomosti Says

  • Turkey's Is Bankasi buys Bank Sofia in Moscow

  • Moscow airport Vnukovo to impose noise restrictions in 2011

  • Vladimir Potanin owns “a small stake” in RusAl, and Gazprom, LUKoil and Sberbank stock, Kommersant said, citing the businessman. (Bloomberg)

  • Russian Railways valued the 75 percent stake it plans to sell in its Freight One unit at $6 billion, Vedomosti reported Monday, citing chief executive Vladimir Yakunin. (Bloomberg)

  • Sberbank may replace 15 percent of its management staff under a new program to evaluate competency, Kommersant reported Monday, citing chief executive German Gref. (Bloomberg)

  • Bank of Moscow chief  Andrei Borodin and his partner may control 44 percent of the institution — which has $3.5 billion of the city’s money on deposit — enough to stop the city administration from implementing key decisions, Vedomosti reported Monday, citing unidentified sources. (Bloomberg)

  • Russia will lift a ban on flour exports from Jan. 1, while grain exports will be suspended until July 1, according to a decree published on the government web site Monday. (Bloomberg)

Activity in the Oil and Gas sector (including regulatory)

  • Bashneft makes advance payment to bid for strategic oilfields - Bashneft has made an advance payment in the amount of RUB 18.171bn (approx. USD 601m) for participation in the tender for the development of Trebs and Titov strategic oilfields, the oil company's press office reported to RBC on Monday.

  • Shell to prospect oil and gas in Russia’s Astrakhan

  • Novatek acquires Novatek Ust Luga

  • Another Chance for the Odessa-Brody Pipeline

  • Lukoil Junk Threat Eases Before Eurobond Sale: Russia Credit


  • Gazprom scouting Sakhalin sites for oil refinery

  • Gazprom Seeks ONGC’s Sakhalin Stake, IANS Says

  • Russia's Gazprom in talks over LNG supplies to India


Full Text Articles

Basic Political Developments

Russian Interior Ministry confirms that Ded Hasan was selling arms to PKK

Tue 26 October 2010 05:36 GMT | 7:36 Local Time

Ded Hasan (Aslan Usoyan) was selling arms to the Kurdistan Workers’ Party.

While speaking to Russia Novaya Gazeta, spokesman for the Russian Interior Ministry said Ded Hasan (Aslan Usoyan) was selling arms to the Kurdistan Workers’ Party (PKK).

While speaking to Novaya Gazeta, a representative of the Russian Interior Ministry, whose name is not specified, also said Ded Hasan was merely paying salary to militia and prosecution officials. In addition, he had very close ties with several Russian deputies, as well as officials of the federal security bodies of Russia.

Earlier, Turkish Milliyet, referring to Russian sources, said that Ded Hasan was selling arms to PKK.

A few weeks ago, the well-known criminal authority Aslan Usoyan (called Ded Hasan) was shot as he was approaching his son’s house at Tver street. Ded Hasan was wounded into the stomach and his bodyguard Artur Bagramyan was injured into a shoulder. Both were brought to hospital.

Europe should rely less on Russian energy-Lithuania
Tue Oct 26, 2010 7:14am GMT

MADRID Oct 26 (Reuters) - Europe needs to break its dependence on Russian energy by improving its internal gas market, Lithuania's prime minister said in an interview published on Tuesday in the Spanish newspaper El Mundo.

"We depend on Russian gas supply 100 percent and on imported electricity 50 percent," Andrius Kubilius said.

"Alternatives need to be built to ensure Europe is not dependent on Russian energy, to ensure an internal gas market that ensures we feel safe in terms of supplies from Moscow."

Russia is currently Lithuania's only supplier of natural gas, and Lithuanian officials have complained repeatedly that the Baltic state is paying more for gas than Germany, which can also buy gas on a spot market.

Lithuania is implementing a new energy strategy to reduce its reliance on Russia that includes building a new nuclear plant. [ID:nLDE68D1XA].

The prime minister also reiterated the former Soviet republic's commitment to joining the euro in 2014. "It will bring stability in the long term," he said.

"Our currency is tied to the euro in such a way that the central bank cannot use devaluation during the crisis. So you could say we have the problems of the single currency but without the benefits for the moment." (Reporting by Sarah Morris; editing by Mark Heinrich)

Medvedev has dismissed several top military
26.10.2010 | Source:
RIA Novosti
Russian President Dmitry Medvedev has made several personnel changes in the RF Armed Forces. It is reported by the Kremlin press service.
So, Colonel Igor Afonin, who served as commander of the 8 th missile division, was appointed commander of the 14 th Missile Division. His place was taken by Colonel Leonid Miholap.
Lieutenant-General Alexander Miroshnichenko appointed pomoschnikomglavy Defense Ministry. Maj. Gen. Yuri Parsley led the military branch of the Scientific-Research Center Air Force Air Force Academy in the town of Yeisk.
In addition, the president fired several soldiers. Dmitry Yashin relieved as commander of the 138-th Guards separate motorized rifle brigade of the Leningrad military district. Discharged from military service, deputy chief of the Main control arms the Armed Forces Research and Development, Major-General Nikolai Vaganov, deputy chief of staff of the Leningrad military district on the organizational and mobilization work, Major-General Alexander Ionov, Deputy Commander troops LenVO armament, Major-General Alexander Mazharov.

Russian defence reforms under fire
by Anna Arutunyan at 25/10/2010 20:26

Pressure on Defense Minister Anatoly Serdyukov is increasing after the Kremlin told the former tax chief to get his act together after a cursing scandal broke out, drawing attention to an already unpopular military reform campaign.

Serdyukov reportedly received a telephone call from the Kremlin last week, ordering him to “conduct a balanced, thought-out development to form a positive image of the military reform that is being conducted by the leadership of the country,” Nezavisimaya Gazeta reported Monday, citing a Kremlin source.

The State Duma’s Defence Committee, meanwhile, has formed a commission to investigate the allegations against Serdyukov, Nezavisimaya reported on Monday.

A source at the Defence Committee confirmed the reports, but Mikhail Babich, the Duma deputy charged with heading the investigation, was unavailable for comment as of print time.

The Kremlin source told Nezavisimaya that President Dmitry Medvedev was “very concerned” about Serdyukov’s recent behaviour, when he cursed out the commander of a paratroopers academy in Ryazan and demanded the demolition of a church there. The Sep. 30 incident sparked outrage, with a video from Russia’s paratrooper’s association demanding Serdyukov’s resignation – and there were even rumours that Prime Minister Vladimir Putin had asked Serdyukov to resign.

The government has denied Putin’s involvement, saying the reports – which first appeared in Argumenty Nedeli newspaper – were “made for hire”.

The Paratroopers Union Of Russia – which released two video addresses last week demanding that Medvedev look into deliberate attempts to undermine Russia’s paratrooper force – still says it has not received an official response.

“We already had a provocation on Friday, and it turned out to be a fabrication,” a source at the Union who declined to give his name told The Moscow News in reference to rumors about Serdyukov’s resignation. “We have no knowledge that Medvedev has responded. Until we have evidence of a real investigation, we are not commenting.”

Unpopular minister

The Ryazan incident and the video address from the paratroopers union merely served as another trigger for a prolonged backlash against Serdyukov, seen as an outsider and disliked by top brass at the military. The former tax chief was appointed in February 2007 by then-President Putin in a bid to kick-start a much-needed reform process.

So far, that process has involved slashing the army down to 1 million people by 2011, from the current 1.2 million, sacking hundreds of generals and doing away with entire divisions. These plans, announced in the summer of 2008, have made the outsider Serdyukov – dubbed “the furniture man” by some in the military for his 10-year stint as a manager at a St. Petersburg furniture factory in the late 1980s – doubly unpopular.

This animosity is obvious, analysts say, since generals would fiercely resist anyone who so much as raises a finger against the status quo – particularly the military’s budgets.

“Serdyukov comes from a financial background. He understands where the money coming from the defence budget actually goes,” security analyst Yury Fyodorov, of Chatham House, told The Moscow News. “His first aim is to bring order to the financial flows. The generals don’t like that.”

As for the specific allegations against Serdyukov, Fyodorov called them “hypocritical”.

“Everyone in the army talks like that,” he said.

Another resignation?

Despite reports about Putin’s comments, it is far too early to talk about any potential resignation for Serdyukov in the near future, Fyodorov said, especially with the presidential elections of 2012 looming nearer.

Others said that deciding what do with Serdyukov and the reforms given the intensifying backlash would pose a major headache for both Medvedev and Putin.

A growing number of retired army officers are becoming potentially “explosive,” military expert Pavel Baev of the Oslo-based Peace Research Institute was quoted by The New Times as saying. “They are a serious political force capable of organisation. And this scenario would be very unwelcome for Putin and Medvedev.”

And bigger question being decided here, experts say, is not just Serdyukov’s fate, but whether the campaign against him could also sink the whole project to reform the military.

The Paratroopers' Attack
26 October 2010

By Alexander Golts

You may be surprised to learn that Russia’s paratroopers are the most pious of all military personnel. Last week, retired chiefs of the paratrooper corps asked President Dmitry Medvedev and Patriarch Kirill to evaluate what they considered to be the inappropriate behavior of Defense Minister Anatoly Serdyukov. The defense minister apparently flew into a rage when he discovered that there was a church on the territory of a paratrooper training center near Ryazan. He chewed out the center’s commander and reportedly issued an order to raze the church.

But there were several different versions of the story. For example, paratrooper commander Vladimir Shamanov said in a statement carried by that Serdyukov had only suggested moving the church from the military compound — where it was apparently poorly attended — to a nearby village to give local residents access to the church. In addition, Deputy Defense Minister Grigory Naginsky said the cause of the conflict was not the church per se but that several buildings had been constructed at the training center without the proper permits.

There is another interesting aspect of this story. The church incident started on Sept. 30, but it was not publicized on the Internet until Oct. 14. This means that the offended paratroopers endured the insult a full two weeks before raising an outcry. In addition to questioning Serdyukov’s religious values and his alleged desecration of the church, the petitioners complained that he appointed the “wrong person” as director of the training center, lowered the status of the center and gave insufficient attention to the museum of the paratroopers.

Behind all the commotion and burst of activity against Serdyukov is a new revolution that is brewing in the armed forces. For the first time, even the highest-ranking officers are being freed from the heavy burden of managing the expenditure of funds. From now on, unit and district commanders will not have to answer for the condition of the boiler plant or the canteen or for getting electricity to the troop compound. Now every manner of supplies, from boots to bullets will be supplied by civilian agencies. Military reformers want to put an end to the system in which troop commanders are more concerned about running their own private “profit centers” than building able, qualified soldiers who are combat-ready.

For decades, commanders have been forced into a corner. They have had to devote most of their time and energy to making repairs and improvements to their military bases without relying on government funding. The only way they could pull this off was by inventing a barter system that relied on their only commodity available — unpaid laborers in the form of conscripted soldiers — in return for building materials or other goods.

During the Soviet era, the Communist Party kept the practice of “slave labor” more or less under control. But in the 1990s, when the government had almost no money to maintain the gigantic military machine, military units were forced to scrape by on their own. As a result, brigade and deputy army commanders have become better con artists than military commanders. That is more their misfortune than their fault. Realizing this, the Defense Ministry is creating a special system for retraining senior officers.

But few commanders are inspired by the prospect of working night and day to improve the preparedness of the armed forces and implementing new methods for bringing troops into battle readiness, particularly when their units are underfunded. Many have come to rely on the money they earn under the table as their primary source of income. They perceive Defense Ministry innovations as a threat to those vested interests.

After the paratroopers created a scandal over the church, they showed that they weren’t shy about expressing their grievances. This proves that Serdyukov has his work cut out for him.

The paratroopers — true to their reputation as being avant-garde — delivered the first blow to Serdyukov’s reforms. There could be many more where that came from.

Alexander Golts is deputy editor of the online newspaper Yezhednevny Zhurnal.

Medvedev to chair presidential modernisation commission meeting

26.10.2010, 08.58

MOSCOW, October 26 (Itar-Tass) - Russian President Dmitry Medvedev will hold in Naberezhnye Chelny on Tuesday a meeting of the Commission for Modernisation and Technological Development of Russia’s Economy. It will also examine the organisational and technical issues of implementing energy efficiency projects.

Russian presidential aide Arkady Dvorkovich said on Monday that within the working trip Medvedev “will meet the management and workers of KAMAZ.”

“This time the commission’s meeting will focus on improving energy efficiency of Russia’s economy - more precisely, regional programmes to improve energy efficiency,” the official said. “The issues that are priorities are linked with the introduction of new systems for measuring the consumption of electricity and other energy in budget organisations, by legal entities and subsequently in the housing sector,” the RF president’s aide specified. “There are many technical and organisational aspects of this process and the further action.” “We will see where the losses are, where the main sources of inefficiency are, and projects that need to be implemented in the coming years will become obvious,” he noted. “Accordingly, the financing issues will arise and also who will be responsible for projects’ implementation,” he added.
Putin to chair conf on priority investment projects in Siberia

26.10.2010, 03.17

MOSCOW, October 26 (Itar-Tass) – Russia’s Prime Minister Vladimir Putin is expected to chair a conference on the implementation of priority investment projects in the Siberian Federal District, which the government endorsed in the format of a strategy of Siberia’s social and economic development through to 2020.

The strategy was made public April 9, 2010 at an inter-regional conference of the ruling United Russia party in Novosibirsk, the government press service said.

The purpose of the strategy is to meet, first of all, the practical needs of people living in the Siberian regions, to improve their quality of life, as well as to promote the comprehensive development of the Siberian Federal District, including infrastructure, energy and transport components.

Sources expect that the conference will highlight the projects like the construction of a railway line between Kyzyl, the administrative center of the Tyva region, and the town of Kuragino in the neighboring Krasnoyarsk territory.

WikiLeaks to publish classified documents from Russia, China

Oct 26, 2010 09:36 Moscow Time

The WikiLeaks website, which provoked a scandal by posting the Pentagon’s classified documents about US military action in Iraq and Afghanistan, says it will gather and make public documents from Russia, China and other countries. This came in a statement by the site founder’s assistant Kristinn Hrafnsson in an interview with the Russian Kommersant daily. He said the site management spent much time on preparing documents form Iraq and Afghanistan, adding that work would soon resume on information form other regions. At present the Russian part of the site features no important documents. The latest scandal around WikiLeaks was triggered by the publication of its Iraq war file offering shocking figures for civilian losses.

WikiLeaks to release secret Russia, China logs - paper
11:13 26/10/2010

Whistleblower website WikiLeaks, which has published hundreds of U.S. war logs, is preparing to release secret files from Russia and China, a Russian newspaper said on Tuesday.

"Russians are going to find out a lot of interesting facts about their country," WikiLeaks spokesman Kristinn Hrafnsson told Kommersant.

The main goal of the project was the "despotic regimes in China, Russia and Central Eurasia," WikiLeaks founder Julian Assange wrote to potential investors when he launched the website in 2006.

WikiLeaks published some 400,000 secret U.S. military files revealing the truth about the conflict in Iraq. The documents suggest U.S. forces turned a blind eye to evidence of torture by the Iraqi authorities. Other files reveal that the number of civilian casualties was far greater than Washington admitted.

General George Casey, who was in charge of U.S. forces in Iraq from 2004 to 2007, rebutted the allegations of torture.

MOSCOW, October 26 (RIA Novosti)

Russian, Montenegrin ministers to discuss situations in Balkans

26.10.2010, 01.43

MOSCOW, October 26 (Itar-Tass) – Russian Foreign Minister Sergei Lavrov is expected to receive his Montenegrin counterpart Milan Rocen at the Foreign Ministry’s house for official receptions Wednesday.

Rocen is visiting Moscow to attend the fourth session of the Russian-Montenegrin intergovernmental commission for cooperation in trade, economy, science, and technologies.

"The heads of both ministries will discuss the state of and prospects for the development of bilateral ties, which traditionally have friendly character," Foreign Ministry spokesman Andrei Nesterenko said.

"They will be also map out a schedule of joint activities in the light of the upcoming 300th anniversary since the establishment of political relations between the countries, due in 2011,” he indicated.

“The side plan signing a joint plan for consultations between the two ministries for the years 2011 and 2012,” Nesterenko said adding that Lavrov and Rocen are expected to hold an extensive review of an international agenda, which includes the situations in the Balkans.

Russia's FM to visit Poland on bilateral cooperation

08:48, October 26, 2010

Russian Foreign Minister Sergei Lavrov starting a two-day visit to Warsaw on Wednesday will take part, together with Polish Foreign Minister Radoslaw Sikorski, in the 6th meeting of the Committee for Polish-Russian Cooperation Strategy, local media reported Monday.

The Committee, to meet on Thursday, will focus its debates on Polish-Russian bilateral cooperation.

Rafal Sobczak of the Polish Foreign Ministry's press office told the PAP news agency that the committee will also refer to international politics, relations between Russia and the EU, as well as to possibilities of cooperation in respective fields, including the energy sector and foreign policy.

The two ministers will present, for the first time, diplomas for outstanding contribution to the deepening of mutual understanding and rapprochement of Polish and Russian societies.

The Committee for Polish-Russian Cooperation Strategy has been set up following the January 2002 visit to Poland by then Russian President Vladimir Putin. Its task is the arrangement of various aspects of cooperation before meetings of representatives of both countries' top authorities.

Source: Xinhua

Ten agts on Russia-Ukraine economic ties to be signed in Kiev

26.10.2010, 09.30

KIEV, October 26 (Itar-Tass) - Ukraine and Russia plan to sign ten documents at the seventh session of the intergovernmental commission for economic cooperation that will be held in Kiev on October 27 with participation of the two countries’ prime ministers – Vladimir Putin and Nikolai Azarov, Russia’s ambassador to Ukraine told reporters here on Tuesday.

“We expect that five interstate agreements and five commercial agreements will be signed,” Ambassador Mikhail Zurabov said. He added that at the present moment the foreign ministries of Ukraine and Russia specify details of the agreements.

Zurabov stressed that particular attention will be paid to energy cooperation. In particular, the sides will consider their relations in the gas sphere. It is also expected that Prime Minister Vladimir Putin will attend a cadete ball on October 27.

26.10.2010 10:39

Lytvyn to pay working visit to St. Petersburg on 27-28 October

Speaker of the Verkhovna Rada of Ukraine Volodymyr Lytvyn will pay a working visit to St. Petersburg on 27-28 October to participate in the measures of the Interparliamentary Assembly of the CIS Member States.

The press service of the Verkhovna Rada of Ukraine disclosed to UNIAN that Volodymyr Lytvyn will participate in the sitting of the IPA CIS Council and international interparliamentary conference, dedicated to the presidency of the Republic of Kazakhstan in OSCE.

In accordance with the program of visit, V. Lytvyn will meet with Sergey Mironov, Chairman of the Federation Council of the Federal Assembly of Russian Federation, Boris Gryzlov, Chairman of the State Duma of the Russian Federation, Ural Mukhamedzhanov, Chairman of the Majilis of the Parliament of the Republic of Kazakhstan and Sergey Antufiev, Governor of the Smolensk Oblast of the Russian Federation.

Naftogaz to take loan from Russian VTB Bank

KYIV, October 26. /UKRINFORM/. Ukraine's oil and gas monopoly, NJSC Naftogaz of Ukraine, announced plans to take a USD 180 million loan from one of Russia's largest banks, VTB Bank, Naftogaz said in a statement.

The company announced a tender (with the procedure of procurement from one participant) for services on providing credit recourses in the form of a credit facility with the debt limit of up to USD 180 million.

The offer price from VTB Bank, according to an announcement, is UAH 152.136 million.

In September, Naftogaz announced a tender to attract a credit facility from VTB Bank totaling USD 400 million.

In mid-October, NJSC Naftogaz of Ukraine said it was planning take a loan at more than UAH 1 billion (USD 1 - UAH 7.91) from the state-owned Ukrgasbank and Prominvestbank (PIB).

In September, Naftogaz borrowed USD 50 million from PIB.

In mid-September, Naftogaz CEO Yevhen Bakulin said all funds attracted by the company would be used to purchase natural gas with further pumping into underground storages.

Chinese to Lend $6Bln for Coal
26 October 2010

By Olga Razumovskaya

The government will unveil coal deposits that Russian companies will develop using $6 billion in Chinese loans by the year's end, Deputy Energy Minister Anatoly Yanovsky said Monday.

The deposits may include assets owned by Sakhalinugol on Sakhalin Island and the Elegest coal field in eastern Siberia, Yanovsky said on the sidelines of the annual International Energy Week conference.

The announcement comes as Russia and China have stepped up cooperation in developing trade in oil and gas. Russian oil is scheduled to start flowing across the Chinese border in a new pipeline in January, and the governments expect an agreement on gas sales by July so they can start building another pipeline.

Yanovsky said it was for the Russian companies and Chinese banks to negotiate the coal deposits and was not for the Energy Ministry to decide. He didn't name the companies that were in talks.

Russian coal producers will use the Chinese loans to finance investments in return for a guarantee to increase supplies to China, where demand is rising for coal used in making steel and fueling 80 percent of its power plants.

Federation Council member and businessman Sergei Pugachyov's United Industrial Corporation has the permit to the Elegest coal field with reserves of 946 million metric tons of coal. In early September, the company hired Credit Suisse Group to privately place 75 percent of its shares.

Another major player, Mechel, obtained local financing to develop coal deposits and won’t use Chinese money, Yanovsky said, Bloomberg reported. The company is currently developing the Elga mining project in eastern Siberia.

Nikolai Sosnovsky, a metals and mining analyst at UralSib Capital, said Evraz and Severstal might be vying to develop coal deposits if those sites held metallurgical coal.

He suggested that perhaps the government has to offer licenses in Tuva, where potential is high to discover coal reserves.

The loan is aimed at Russian — not Chinese — coal producers, in a diversion from China's traditional policy of giving loans to its own.

China, the world's biggest coal consumer, plans to increase its annual coal imports from Russia to 15 million tons in the next five years and raise that to at least 20 million tons in 20 years, according to the statement posted on the Russian Industry and Trade Ministry last month.

China presents itself as an increasingly attractive market for oil, gas and mining companies, especially after demand for fossil fuel on the European market decreased.

Gazprom appears to be moving forward in its bid to gain a larger footprint on the Chinese market, where it has been selling only scant shipments of liquefied natural gas from its Sakhalin project.

China is at the top of the strategic partners list in Asia for the company, Stanislav Tsygankov, Gazprom's head of international business, said during the conference.

“Today the European market is not the only market for us,” Tsygankov said.

Russia expects to sign a gas supplies agreement with China in 2011 and will be ready to begin deliveries in 2015, Tsygankov said.

China's yearly demand for gas in 2020 will be about 300 billion cubic meters, Tsygankov estimated. China now produces 80 bcm of gas domestically.

As for the traditional market — Europe — Gazprom is optimistic. According to the company's forecasts, Europe's interest in gas imports will gradually increase to the mark of 380 bcm by 2020 and 440 bcm by 2030, he said.

Chinese cash to power Russian coal

October 26, 2010

Just as it is building pipelines to carry Russian oil and gas to its rapidly expanding economy, Chinese cash is ready to help Russian companies develop coal deposits in the east of the country in order to export it south, reports The Moscow Times.

Speaking at the International Energy Week conference yesterday, Deputy Energy Minister Anatoly Yanovsky said that by the year's end the government will unveil coal deposits that will be developed using $6bn in Chinese loans.

Russian coal producers will use the cash to finance investments, in return for a guarantee to increase supplies to China, where demand is rising for coal used in making steel and fueling 80% of the country's power plants.

The deposits may include assets owned by Sakhalinugol on Sakhalin Island and the Elegest coal field in eastern Siberia, Yanovsky said. He added that it is for the Russian companies and Chinese banks to negotiate individual deals, and claimed that it's not for the Energy Ministry to make decisions. He declined to name the companies in talks with the Chinese.

The announcement comes as Russia and China have stepped up cooperation in developing trade in oil and gas. Russian oil is scheduled to start flowing across the Chinese border in a new pipeline in January, and the governments expect an agreement on gas sales by July so they can start building another pipeline.

That the loans are aimed at Russian, not Chinese, coal producers, is a diversion from China's traditional policy of giving loans to its own, but this reflects deals in oil and gas over the past few years.

With China's economy so thirsty for energy, it is constantly looking to both expand and diversify its energy supplies. It is about to reap some of the benefits of its Russian cooperation, with Transneft and Rosneft - who were handed tens of billions of dollars worth of loans - about to start delivering 15m tonnes of oil per year through the Chinese spur of the ESPO pipeline.

Russia also hopes that Bejing will agree to fund the Altai gas pipeline, which carry gas from Western Siberia, as the pair draw closer to finally agreeing on gas deliveries after years of disagreement over prices. China has successfully plugged itself into Central Asian hydrocarbons producers in the meantime, as well as seeing imports from the Middle East, Australia and South America boom.

Now the world's biggest coal consumer hopes to increase annual coal imports from Russia to 15m tonnes in the next five years, and raise that to at least 20m tonnes within the next 20 years, according to a statement from the Russian Industry and Trade Ministry last month.
October 26, 2010 11:19

Russian, Sudanese officials to meet in December

MOSCOW. Oct 26 (Interfax) - Russian presidential representative on Sudan Mikhail Margelov intends to meet with Sudanese top officials during a visit to Sudan in December.

"During this visit, I will meet with representatives of the Sudanese government and will continue discussing the issues raised by the Russian president and the president of Sudan," Margelov told Interfax.

Margelov said Russian President Dmitry Medvedev and his Sudanese counterpart Omar Bashir have recently had a phone conversation.

"The Russian leader emphasized the main areas of the efforts taken by the international community in Sudan, which should be unbiased and should be carried out in constructive cooperation with Khartoum. The Sudanese leaders agree with that and highly appreciate Russia's contribution to the solution of difficult problems," Margelov said.

Margelov said Russian-Sudanese relations are developing in different areas, pointing out the high potential of the trade and economic relations between the two countries.

"At the same time, Russia and some other countries are actively participating in the resolution of the lengthy conflict in Sudan. The main task of the mediators is to promote the fulfillment of the agreements between the parties to the conflict in Sudan on the comprehensive peace settlement," he said.

Among these agreements Margelov mentioned the recent elections, which went satisfactorily given the current situation in Sudan, adding that the next step is a referendum on the self-determination of the southern part of the country.

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Russian and Sudanese presidents discuss referendum, bilateral relations

Tuesday 26 October 2010

October 25, 2010 (KHARTOUM) — Russia has showed today its interest to play a role in the resolution of the outstanding issues between the two Sudanese peace partners and organize a peaceful referendum that might affect the regional stability. Russian President Dmitry Medvedev discussed Monday in a telephone conversation with his Sudanese counterpart Omer Al-Bashir the ongoing efforts to settle the row between the National Congress Party and the Sudan people’s Liberation Movement.

President Al-Bashir briefed Medvedev on the preparations to hold the southern Sudan referendum and stressed Khartoum commitment to hold it as scheduled next January.

For his part, Medvedev reaffirmed Russia readiness to continue its active efforts in cooperation with the international community to facilitate it. He further stressed that these efforts should be "unbiased and balanced, in order to facilitate constructive interaction with Khartoum", the Kremlin said in a press statement.

The official SUNA in Khartoum said the Russian President called to write off Sudan’s debit.

Sudan demands to cancel its debit as this issue is one of the outstanding issues the two partners of the Comprehensive Peace Agreement failed to settle.

The two presidents also agreed to develop trade and economic relations between the two countries. Medvedev further pledged to increase Russian investments in agriculture, mining and oil.

The Russian special envoy to Sudan, Mikhail Margelov, will visit Sudan next December to follow up the implementation of the issue discussed today by the two presents.


Russian, Sudanese leaders discuss referendum in Sudan
26 October 2010 | 02:25 | FOCUS News Agency

Home / World

Moscow. Russian President Dmitry Medvedev on Monday discussed by phone with his Sudanese counterpart Omar al- Bashir the normalization of situation in this African country, Xinhua informed.
The Sudanese president gave a high remark to Russia's efforts on finding a solution to the situation, said a statement published on the Kremlin website.
In Jan. 2011, a referendum was planned in Sudan which would decide ways of further development for this divided nation.
Medvedev reiterated Russia's readiness to keep working on the Sudanese issue "within the international community efforts, which should be unbiased and balanced, in order to facilitate constructive interaction with Khartoum," said the statement.
The Russian president noted that the referendum would meet real interests of both Sudan and the entire region, while voicing support for al-Bashir's position on timely conducting of the poll.
The two leaders also discussed trade and economic cooperation between Moscow and Khartoum during the conversation.
A referendum on self-determination for southern Sudan was expected to be held on Jan. 9, 2011 to decide whether the region should remain united with north Sudan or secede and establish an independent state.

Telephone conversation with President of Sudan Omar Bashir

October 25, 2010, 17:00

Dmitry Medvedev and Omar Bashir discussed reconciliation in Sudan on the eve of a historically important stage in the nation’s development – Southern Sudan’s referendum on independence, scheduled for early January 2011.

The President of Sudan gave a positive assessment of Russia’s efforts to promote finding a resolution to existing problems.

In turn, Dmitry Medvedev emphasised Russia’s readiness to continue working actively with Sudan within the framework of the international community’s efforts, which must be impartial, well-balanced, and based on constructive cooperation with Khartoum. At the same time, Mr Medvedev noted that timely elections serve the long-term interests of Sudan and the entire region, and in this regard, supported Omar Bashir’s repeated statements about holding the referendum as scheduled.

During the conversation, the presidents expressed their support for strengthening trade and economic ties between their nations and discussed specific areas for this kind of cooperation.

October 25, 2010, 17:00

Ethiopia praises Russia role in region, relations - MFA
Published 10/26/2010 - 12:50 a.m. GMT
SOURCE: Federal Democratic Republic of Ethiopia Ministry of Foreign Affairs

"Core principles of Ethiopia’s Foreign Policy: Ethiopia-Russia relations"

Ethiopia and Russia have longstanding historical relations going back to the period of the Russian Czar Machilovich, the father of Peter the Great, in the 17th century. It is also recorded that Alexander Pushkin, a renowned Russian writer, was a grandson of Abraham Hannibal,an Ethiopian who lived in Russia. Other early contacts between Russia and Ethiopia include the visit of an Ethiopian delegation sent by the Emperor Menilek II to Russia, and visits of several Russians to Ethiopia during Menilek’s reign, at least one of whom was given the title of Dejazmatch for his travels on behalf of the Emperor along Ethiopia’s southern boundaries. These contacts laid the foundation for the close relations of the two countries, based on mutual respect and friendship between the two peoples. And it is notable that regardless of the differing political systems that existed at various times, relations between them have continued close and friendly.

One demonstration of that friendship has been that Russia has always, and without fail, stood with Ethiopia whenever the sovereignty of Ethiopia was threatened. Russian solidarity with Ethiopia was first illustrated when the Russian Red Cross Society came to Ethiopia in 1896, at the time of the Battle of Adwa when Italy attempted to attack the country. It made an outstanding contribution in provision of medical supplies and care to the Ethiopian patriots on the battlefield and subsequently. Again, during the fascist invasion of Ethiopia in 1936, Russia was one of those countries which stood in solidarity with Ethiopia. It has done so on every occasion throughout the 20th century whenever Ethiopia faced challenges to its sovereignty and its core national security interests. In short, the bonds that exist between Ethiopia and Russia have stood the test of time and proven their strength time and again.

The most important historical landmarks of Ethio-Russia historical relations visible in Addis Ababa are the large plot of land granted for the construction of a Russian mission after the Battle of Adwa, where the Russian Embassy is still located, and the establishment of the Russian Hospital, now the Balcha Memorial Hospital. Diplomatic relations between Ethiopia and Russia were upgraded to Embassy level when both countries opened their respective embassies in Addis Ababa and Moscow in 1956. While relations between Ethiopia and Russia continued throughout the Imperial era, they were much closer during the Marxist, military regime of the Derg when both counties belonged to same ideological camp. With the change of government in Ethiopia and the collapse of the Soviet Union, relations were placed on a different footing, but they remained warm and friendly. In recent years, there have been increased exchanges of visits of high level officials between the two countries. Major visits have included Prime Minister Meles’s trip to Moscow in December 2001 and Foreign Minister Seyoum in November 2007; former Russian Prime Minister, Mikhail Kasyanov came to Ethiopia in September 2002; and Russian Foreign Minister Sergey Lavrov came here in September 2006.

In order to strengthen their economic ties further, the two countries established a Joint Commission on Economic, Scientific, Trade and Technical Cooperation in 1999. The Commission held its first meeting in Moscow; and the second in 2002 in Addis Ababa. The third, in February 2008, was in Moscow and the fourth will take place in Addis Ababa at the end of this year. The main areas of cooperation covered under the Joint Commission include energy, mining, transport, agriculture, education, health, tourism and telecommunications. Although these meetings have taken place at both expert and ministerial levels, the results have not been as extensive as hoped. There is also considerable potential for enhanced trade and investment. Three major agreements, on Economic, Scientific and Technical Cooperation, Avoidance of Double Taxation, and Promotion and Reciprocal Protection of Investment have been signed.

The major commodities Ethiopia exports to Russia include coffee, leather and leather products, and flowers. It imports industrial products, machinery, chemicals, and other capital goods from Russia. The trade balance favors Russia and the total trade volume of the two countries was nearly 2 billion birr in 2009. Currently, there are 23 investment projects registered in Ethiopia by Russian investors; 21 are in the pre-implementation stage, while two are under implementation. Total Russian investment in Ethiopia amounts to just over a billion birr as of August last year. Measures to expedite Russia’s ratification of the agreements on Avoidance of Double Taxation and Promotion and Reciprocal Protection of Investment would help to further improve trade and investment relations. The priority areas of interest for Russian companies in Ethiopia include mining and mineral resources, oil and gas, gold, tantalum, heavy metals and platinum exploration as well as hydro and geothermal power generation. Russian companies have preferred to acquire mineral concessions rather than participating in international tenders. Given the long-standing relationship, and the priority that the RUS-AID program gives to ex-socialist countries, it is expected Ethiopia will be one of the priority countries for Russian development cooperation. The fight against terrorism is another area where the two countries do cooperate, and in this connection, Ethiopia is very appreciative of the highly effective cooperation in security areas which exists between the two countries. Equally, with the centuries of relationship, there is a lot more that can be done to further enhance our ties while fraternal relations between our two peoples continue to be anchored on a firm basis.

In the light of Russia’s historic interests in Africa, and its position in the UN Security Council, Ethiopia expects Russia to play an active role in issues relating to Africa in general and the Horn of Africa in particular. Indeed, Russian support for the Security Council sanctions imposed on Eritrea last December was decisive. It is in fact appropriate to express appreciation for Russia’s interest in the Horn of Africa. The appointment of a Special Envoy to Sudan also demonstrates the level of attention Russia has given to the sub-region, and there is no doubt that Russia could play a significant role in providing peace and stability in Somalia as well as Sudan.

Print Date : Tuesday, October 26, 2010

Tehran, Russia at odds over Iran’s nuclear program: ambassador

Tehran Times Political Desk

TEHRAN – Tehran’s ambassador to Moscow Reza Sajjadi has said Tehran and Moscow have serious disagreements over Iran’s nuclear issue.

“Our approach and Russia’s toward this issue are completely two different approaches,” Sajjadi told ISNA news agency in an interview published on Monday.

Unfortunately, Russia has made a big mistake concerning Iran’s nuclear issue because it was influenced by West’s propaganda, he noted.

Russia was made to believe that there is no peaceful purpose behind Iran’s nuclear program and that is why it has distanced itself from the Islamic Republic, Iran’s top diplomat in Moscow stated.

Sajjadi went on to say that Iran and Russia have many commonalities and it is not prudent for Russia to distance itself from Iran.

Today Iran is helping to prevent the spread of terrorism in the Caucasus region as well as smuggling drugs to Russia, the diplomat added.

Asked about the Russian president’s recent remarks that Moscow is interested to expand ties with Europe and the U.S., he said Russia is concerned about the future of its economy.

Moscow believes that if it cannot improve its economy, it will face serious security problems to the extent that Russia will disintegrate into more separate republics, Sajjadi added.

The ambassador said Russia has been infused with the idea that it has no choice to develop its economy other than reinforcing its relationship with the West

Iran set to load fuel in Bushehr nuclear reactor

05:00 26/10/2010

Iran will start on Tuesday injecting fuel into the core of its first nuclear reactor at the Bushehr nuclear power plant, the local media said citing a senior Iranian lawmaker.

"The Bushehr [nuclear] power plant's fuel will be transferred to the core of the reactor tomorrow [on Tuesday]," Press TV quoted Alaeddin Boroujerdi, the head of the National Security and Foreign Policy Commission of the Iranian Parliament, as saying on Monday.

"Despite policies which the U.S. and certain European countries have adapted to impose sanctions against the Islamic Republic of Iran, we have been able to continue our development policies," the Iranian lawmaker said.

The Bushehr NPP in southern Iran was launched in August with the Russian assistance after decades of construction delays.

Under a bilateral agreement, which has received IAEA approval, Russia will initially operate the plant, supplying its fuel and taking away all the spent fuel for the next two or three years, but will eventually hand over full control to Iran.

Iran remains a target of criticism and sanctions over its controversial nuclear program, which the West claims could be an attempt to build a nuclear weapon.

However, as a member of the International Atomic Energy Agency and a signatory to the Nuclear Non-Proliferation Treaty, Tehran insists its nuclear program is aimed at electricity generation and medical research.

The UN Security Council has approved four rounds of sanctions against Iran over its nuclear program, including tougher financial controls and an expanded arms embargo, as well as an asset ban on three dozen companies and a travel freeze on individuals.

The Bushehr project does not fall under these sanctions.

MOSCOW, October 26 (RIA Novosti)

Fisheries Cooperation With Russia
26 October 2010
The Islamic Republic of Iran and Russia signed an agreement to expand cooperation in protection of fish species in the Caspian Sea.

The agreement was signed at the 6th meeting of Iran-Russia joint fisheries commission held this week in Tehran, Moj News Agency reported.

The two sides will cooperate in researches on Caspian Sea contaminators, fight against illegal fishing of sturgeons, facilitating aquatics imports and exports to and from the two countries, holding annual technical-scientific bilateral meetings on aquaculture and reviving aquatics resources in the Caspian Sea, and transfering know-how on sturgeon cultivation.

Russia will attend a meeting on Caspian Sea living resources on November 2-3, in Tehran. The meeting is aimed at expansion of regional cooperation in fighting against Red Tide in the Caspian Sea.

Russian side also should attend the commission's meeting on distribution of sturgeon exports quota to be held in Tehran on December 18-19, 2010.

Last week, Iranian Deputy Foreign Minister Amir Borqei said at a press conference in Astana that Iran could exchange its remarkable experiences in preserving sturgeon species with the Caspian Sea littoral states,

Iran has great experience in preserving sturgeon species and currently the work is being conducted to restore their population in the Caspian Sea, Borqei said.

"We have adopted a law to preserve sturgeon species. According to it, a six-month ban is imposed on fishing sturgeon", Trend News Agency quoted him as saying.

It should be noted that the sturgeon spawning occurs in the south of Caspian Sea, where people breed this fish.

Iran is making a great contribution to preserve ecology of the Caspian Sea, as a lot of rivers with clear mountain water run in it, he said.

There are no large industrial enterprises in the Caspian provinces of Iran, which would contaminate this part of the sea.

This is important given that sturgeon comes from the north to the south of the Caspian Sea.

According to the head of Iran's Fisheries Organization, Aminollah Taqavi Motlaq, Iran's sturgeon export quota in 2010 accounts for 45.01 percent of the five Caspian Sea littoral states' total quota and the country will export 38.744 tons of the sea food in the current year.

Iran has decided to decrease its quota by 8 percent, he added. Export quota is a restriction imposed by a government on the amount or number of goods or services that may be exported within a given period, usually with the intent of keeping prices of those goods or services low for domestic users.

© Iran Daily 2010

Israel, Russia prioritize economic cooperation - Israeli ambassador
07:02 26/10/2010

Israel and Russia give priority to the development of economic ties in their bilateral relations, the new Israeli ambassador to Russia said.

"The priorities are quite obvious and they mostly concern the development of economic cooperation," Dorit Golender said in an interview with Russia's Kommersant daily published on Tuesday.

According to the Israeli diplomat, bilateral trade in 2010 rose 70 percent year-on-year.

"We are primarily interested in natural resources, which we do not have," Golender said. "For instance, we buy diamonds from Russia and use the Russian technology to process them."

The Israeli ambassador also praised a 45-percent increase in the number of Russian tourists visiting Israel. About 380,000 Russians traveled to Israel in January-September 2010.

"I think it is a colossal achievement," she said.

Golender is a former journalist with more than 40 years of experience. She succeeded Ambassador Anna Azari, who worked in Russia for four years and went home on September 14.

MOSCOW, October 26 (RIA Novosti)

Medvedev submits Russian-French agreement for ratification

Oct 26, 2010 09:41 Moscow Time

Russian President Dmitry Medvedev has submitted the Russian-French intergovernmental agreement on air cargo transit to Afghanistan to the State Duma for ratification. The news was posted Monday on the electronic database of the Russian Parliament’s lower house. Russia has signed similar agreements on cargo transit to Afghanistan with Germany and Spain.  

Medvedev submits agt with on military transit to Afghanistan for ratification

25.10.2010, 23.32

MOSCOW, October 25 (Itar-Tass) -- President Dmitry Medvedev has submitted to the State Duma the agreement with France on military air transit to Afghanistan for ratification.

The agreement creates a legal framework for air transit of French arms, military hardware and supplies, as well as troops and civilian personnel trough Russia’s airspace for participation in ISAF operations in Afghanistan.

Russia has similar agreements with Germany and Spain.

In July, chief of the Russian Army General Staff, General of the Army Nikolai Makarov said Russia would provide for the transit of military cargoes to the coalition force in Afghanistan.

Italy to get back 121 perished in WWII from Russia
Oct 26, 2010 02:50 Moscow Time
Tchkalovsky military airfield near Moscow will receive an Italian delegation on Tuesday.

It will collect and bring home the remains of 121 Italian soldiers who perished on the territory of the Soviet Union during WWII.

Six of the soldiers were identified.

Their families were informed of the findings.

Such ceremonies have been held in Russia since 1991.

Over the years, Italy acquired the remains of as many as 10542 soldiers 2799 of which were identified.

France ready to deliver helicopter carrier with transfer of technologies

09:29 26/10/2010

France's shipbuilder DCNS announced on Tuesday it is ready to deliver Mistral class helicopter carriers to Russia with built-in domestic navigation technologies.

"There are no restrictions [in the transfer of technology]," DCNS Director Pierre Legros told RIA Novosti.

The technology is French-made, a spokesman for the French Navy, Hugues du Plessis d'Argentre, said.

Russia and France are currently in talks on a so-called 2+2 scheme, whereby Russia will buy one or two French-built Mistrals and build another two at home. The contract is expected to be inked before the end of the year.

Legros said he did not rule out that Russia could build four Mistrals.

He added that the French-built Mistrals under the contract will be different from their domestic analogues.

They will have thicker take-off decks and firmer hulls so as to avoid breakage when navigating through ice.

The winner of a tender to deliver the Mistrals, which was called by Russia earlier this month, will be announced after November 4, Legros added.

"We are ready to receive the contract from November 4... and complete construction in 36 months," he said.

The Mistral class ship is capable of transporting and deploying 16 helicopters, four landing barges, up to 70 armored vehicles including 13 battle tanks, and 450 personnel.

LE BOURGET (France), October 26 (RIA Novosti)

Russia to announce helicopter carrier tender at Euronaval 2010
02:56 26/10/2010

Russia could announce a tender on the construction of two amphibious assault ships for the Russian Navy at the Euronaval 2010 exhibition, which opened on Monday in Paris, the Vedomosti daily said.

Vedomosti said citing Russian defense sources that invitations to participate in a closed tender had been sent out to "all interested parties" and the winner of the tender could be announced as early as by the end of this year.

According to the Vedomosti sources, the participants of the tender include Russia's United Shipbuilding Corporation in partnership with the French DCNS (Mistral class ship), the Nevski design bureau in St. Petersburg (Ivan Rogov class ship), S. Korea's STX company (Dokdo class ship), and Spain's Navantia company (Juan Carlos I class ship).

Experts believe that a French Mistral class amphibious assault ship is most likely to win the tender.

Moscow has been in talks with Paris on the purchase of a Mistral class warship on a 2+2 scheme whereby Russia will buy one or two French-built Mistrals and build another two under license domestically.

The two Mistrals built in France could cost Russia as much as 1 billion euros ($1.4 bln).

The Mistral class ship is capable of transporting and deploying 16 helicopters, four landing barges, up to 70 armored vehicles including 13 battle tanks, and 450 personnel.

The 22nd International Naval Defense & Maritime Exhibition and Conference (Euronaval 2010) is held at the Paris-Le-Bourget exhibition center on October 25-29.

MOSCOW, October 26 (RIA Novosi)

Russian space freighter departs ISS on scientific mission
00:34 26/10/2010

Russia's Progress M-05M cargo spacecraft was undocked from the International Space Station (ISS) on Monday to begin an independent scientific mission until November 15, a Mission Control spokesman said.

"The space freighter will continue an autonomous flight as a scientific laboratory until November 15 when it will be deorbited and 'buried' in a remote area in the southern Pacific," the official said.

The undocking of Progress M-05M clears the way for the launch of the Progress M-08M spacecraft on October 27 from the Baikonur space center in Kazakhstan.

On October 30, Progress M-08M is expected to dock with the Pirs docking module vacated by Progress M-05M.

Progress-family freighters have been the backbone of the Russian space cargo fleet for decades. In addition to their main mission as cargo spacecraft, they are used to adjust the ISS's orbit and conduct scientific experiments.

MOSCOW, October 26 (RIA Novosti)

Fragment of space garbage approaching ISS

26.10.2010, 10.37

MOSCOW, October 26 (Itar-Tass) - A fragment of space garbage is approaching the International Space Station, and this, according to NASA specialists, may pose danger to the station and its crew.

“If specialists of the Russian Mission Control Centre (MCC) decide that the approaching has become dangerous, they will make an emergency correction of the ISS orbit,” centre’s spokesman Valery Lyndin told Tass on Tuesday. “The approach is called dangerous, if the possibility of a collision is 0.001 percent,” he added.

Although this percentage is very small, the ISS orbit will be corrected to avoid the dangerous object in order to ensure the safety of the station and the crew.

The decision on that will be made at about noon. In case it is necessary, MCC specialists will correct the orbit at about 14:25, Moscow time, on Tuesday.

Norway’s coast guard detains fish transport ship with Russian crew

Oct 26, 2010 09:26 Moscow Time

Norway’s coast guard has detained the Atlantic Lady fish transport ship with a Russian crew on board. On Monday the ship was taken to the Spitsbergen port of Longyear. The vessel is registered in the Central American state Belize, but the crew is all-Russian and the vessel was bound for Arkhangelsk. This came in a statement on Monday by an assistant to the Spitsbergen Governor Lars Fause. According to the official, the amount of fish on board was weighed after, rather than prior to splitting. It will most likely be unknown until Wednesday whether the Atlantic Lady has or has not violated the Norwegian law.    

Norwegian Coast Guard detains cargo ship with Russian crew

26.10.2010, 06.01

OSLO, October 26 (Itar-Tass) – Fish transport ship The Atlantic Lady was detained over the weekend by the Norwegian Coast Guard on suspicion of encroachments on the requirements for reporting.

Monday, the Coast Guard ship Barentshav convoyed The Atlantic Lady to the port of Longyearbyen on Svalbard.

The detained ship is registered in the Central American state of Belize but it has an all-Russian crew. At the time of detention, it was bound for the northern Russian port of Arkhangelsk, Svalbard governor’s aide Lars Fause said.

He indicated that most of the sea products in The Atlantic Lady’s holds were registered after fish splitting rather than prior to it as required, and according to the Norwegian side this means that the real weight of the catch has been understated by a few tons.

Fause said the ship’s captain has already been interrogated and the inspection will now embrace the trawlers that delivered fish to The Atlantic Lady for further transportation to Arkhangelsk.

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